Puretrop Fruits Ltd Management Discussions

The following discussion presents the financial results of Puretrop Fruits Limited for the financial year 2025-26, along with the companys future business outlook. Some statements may be forward-looking and are included in accordance with applicable laws and regulations. Various factors may influence the actual results, which could differ from the Directors expectations regarding future performance and outlook.

> GLOBAL MARKET

The global processed fruit and fruit ingredients market continued to expand during financial year 2025-26, supported by increasing consumer demand for healthy, natural and convenience- based food products. Growing awareness regarding nutrition, rising consumption of fruit-based beverages, dairy products, bakery items, confectionery products and ready-to-eat foods has significantly increased the demand for fruit pulps, concentrates, purees, juices and frozen fruit products. Rising demand for food products, increasing adoption of modern farming techniques, government support programs, digital agriculture solutions, improved irrigation systems and growing awareness of sustainable agricultural practices contributed to sectoral development and the high-yield crop varieties have enhanced productivity and operational efficiency across the sector.

India remains one of the worlds largest producers of fruits and vegetables, providing a strong raw material base for the processing industry. Government initiatives supporting food processing, export promotion, cold-chain infrastructure and agricultural value addition have further strengthened the sectors growth prospects. Food and beverage manufacturers worldwide are increasingly adopting natural fruit ingredients as consumers shift away from artificial flavors, colors and preservatives.

This trend has accelerated demand for clean-label products, creating growth opportunities for suppliers of processed fruit ingredients. For Puretrop Fruits Limited, the growing global demand for fruit pulps, concentrates, frozen fruits and value-added fruit ingredients presents significant opportunities to expand exports, strengthen customer relationships and increase market share across key international markets. The Companys focus on quality, product diversification and customer-centric solutions positions it well to benefit from evolving global consumption trends.

During financial year 2025-26, the Company continued to strengthen its focus on the processed fruit business following the strategic restructuring undertaken in previous years. Emphasis was placed on improving operational efficiency, expanding market presence, enhancing product offerings and strengthening customer relationships in export markets.

> INDIAN MARKET

India continues to be one of the worlds largest producers of fruits and vegetables, supported by diverse agro-climatic conditions, a large agricultural base and increasing investments in food processing infrastructure.Indias strong production base for mango, guava, pomegranate and other tropical fruits provide a competitive advantage to domestic fruit processors. The country remains a significant supplier of mango pulp and other processed fruit products to international markets, while domestic demand continues to strengthen across retail and industrial segments.

The Government of India continues to support the agriculture and food processing sectors through various initiatives such as the Pradhan Mantri Kisan Sampada Yojana (PMKSY), Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), Agriculture Infrastructure Fund (AIF), Mission for Integrated Development of Horticulture (MIDH), PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme and Operation Greens.

These initiatives are expected to strengthen processing infrastructure, improve supply-chain efficiency, promote exports, reduce post-harvest losses and create significant growth opportunities for companies operating in the processed fruit and food processing industry.

> OPPORTUNITIES

• Development of Strong Farmer Networks:

Direct engagement with farmers through structured sourcing models, groups and aggregators can ensure a stable and high-quality supply of raw materials.

• Technology Integration in Agriculture:

Use of digital platforms, mobile applications, weather forecasting tools and Agri-advisory services can improve decision-making and crop management.

• Rising Demand for Value-Added Products:

Adoption of modern processing technologies, quality control systems, automation and supply- chain digitization can improve operational efficiency, product quality and profitability.

• Strategic Product Diversification:

Expansion into frozen fruits, specialty fruit ingredients and cold-extracted juices for industrial customers can provide additional revenue streams and enhance market presence.

> CHALLENGES

• Climate Change and Weather Risks:

The Company faces challenges relating to climate variability, fluctuating agricultural output, rising cultivation costs, water scarcity, quality consistency, pest and disease incidence and fragmented land holdings. These factors may affect the availability and quality of fruits required

for processing operations. The Company continues to work closely with farmers and sourcing partners to promote sustainable agricultural practices, improve productivity and ensure a reliable supply of quality raw materials.

• Limited Knowledge of Good Agricultural Practices (GAP):

Many farmers may not be fully aware of scientific cultivation methods, proper use of fertilizers, pesticides and irrigation techniques which can affect crop quality and yield. Limited awareness regarding judicious pesticide usage and recommended dosages may result in residue issues, affecting export compliance and food safety standards.

• Impact of Geopolitical Tensions and War-like Situations:

Geopolitical tensions, regional conflicts and war-like situations have adversely impacted global trade, supply chains, logistics costs, commodity prices and foreign exchange markets. Such situations could further affect export demand, transportation costs and operational efficiency. The Company continuously monitors global events and undertakes appropriate measures to diversify markets, strengthen supply chain resilience and mitigate potential risks arising from geopolitical uncertainties.

> GROWTH DRIVERS

Puretrop Fruits Limiteds growth is driven by its strategic transition to a focused food-processing business, rising global demand for processed fruit products, strong export opportunities, improved financial strength following business restructuring, increasing consumer preference for healthy and natural foods, and the gradual scaling of its core processing operations.

These factors position the company for sustainable long-term growth in the fruit-processing industry.

> OPERATIONAL PERFORMANCE

• Diversified Product Portfolio:

The company has shifted focus from exporting raw fruits to its core fruit-processing operations, including fruit pulps, concentrates, purees and juices.

• Certifications and Compliance:

Puretrop has obtained international certifications such as KOSHER, SEDEX and Halal ensuring adherence to global food safety and ethical standards.

• Strong Governance:

The company maintains a clean governance record, with no disqualified directors and complies with applicable regulations.

• Strategic realignment and operational restructuring:

The Company reorganized its business operations by focusing on its core fruit-processing activities and reducing involvement in less profitable segments. Through this restructuring, the company could optimize resource utilization, lower operating costs, enhance productivity and strengthen its competitive position. These measures have resulted in improved overall efficiency and ensure sustainable growth and profitability in the long run.

> FINANCIAL PERFORMANCE

The financial performance of the Company is described in the Directors Report under the head “Financial Result” and “Review of Operations”.

Key Financial Ratios:

The key financial ratios for Financials are as per the table below:( Rs. in Lakhs)

Reasons for significant changes:

The company transferred its fresh fruit business to Green Agrevolution Pvt. Ltd. (DeHaat) in November 2023. This deal allowed Puretrop to pivot more strongly towards its food processing business. Solar power generation plant was set up, Cold storage facilities were

significantly enhanced and mango ripening capacity was increased. This improved operational efficiency, resulting in better quality of our products and a significant reduction in manufacturing costs.

> GROWTH STRATEGY

• Operational Efficiency Improvement:

We focus on optimizing our production processes by reducing operational costs and improving resource utilization to enhance productivity and profitability. By streamlining operations and concentrating on the core fruit-processing business, we aim to achieve better capacity utilization and maintain consistent product quality.

• Research and Development:

Research and Development plays a significant role in enhancing the competitiveness and growth of the Company. We focus on improving product quality, developing value-added fruit-based products and adopting advanced processing technologies to meet changing consumer preferences and international quality standards.

• Enhancing Customer and Market Reach:

Enhancing customer and market reach is an important growth strategy for the company. We aim to expand our presence in both domestic and international markets by strengthening customer relationships, broadening the distribution network and increasing awareness of our processed fruit products. This strategy helps us to access new customers, increase sales volumes and reduce dependence on a limited number of markets.

• Revamping the product segments:

Our product portfolio will be refreshed to focus on value-added, premium categories such as functional beverages and seasonal offerings. We will also explore private label manufacturing and export opportunities for higher revenue diversification. The revamped lineup will position us better in health-conscious and global markets.

• Privileging the farmers:

Strengthening our farmer network is central to sustainable growth, ensuring quality supply and social impact. Through direct sourcing, crop advisory and buy-back arrangements, we offer economic security and fair pricing to farmers. Training in organic and residue-free farming will align production with global quality standards. This inclusive approach enhances traceability, trust and long-term value creation.

> MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATION FRONT:

The company recognizes its employees as a valuable asset and continues to focus on maintaining a productive work environment. The company emphasizes employee development, workplace safety, skill enhancement and effective communication to improve organizational performance and employee satisfaction.

The Company currently has a workforce comprising about 110 people in permanent employment and another about 500 people on seasonal temporary basis. On the industrial relations front, the company strives to maintain harmonious relations between management and employees through transparent policies, mutual trust and employee engagement initiatives. Cordial industrial relations contribute to smooth business operations and improved productivity.

> FUTURE OUTLOOK:

Puretrop Fruits Limited demonstrated steady performance in FY 2025-26, highlighting its operational resilience and ongoing focus on innovation, efficiency enhancement and expansion into new markets. Building on the solid foundation laid last year, the company is poised to capitalize on growing consumer demand for health-conscious and convenience- focused fruit products.

The Company is likely to strengthen its market position through product innovation, expansion of value-added offerings and deeper penetration into international markets thus the shareholders are likely to benefit from enhanced financial performance and improved return potential.

The company will continue to lay emphasis on operational efficiency, cost optimization and process improvement is expected to support margin enhancement and long-term profitability. Strengthening supply chain efficiency and expanding digital and retail distribution channels remain key priorities.

The company also aims to deepen its direct relationships with farmers, promoting sustainable sourcing and ensuring consistent quality raw materials. Investments in research and development will accelerate the rollout of functional and clean-label offerings.

CAUTIONARY NOTE:

The MDA section includes forward-looking statements that highlight the potential future prospects of the company. These statements are accompanied by inherent risks and uncertainties that may cause actual results to differ materially. Additionally, the macroenvironmental changes and the unpredictable nature of global events, such as the Pandemic, create unforeseen challenges for the Company and its operating environment.

The information provided in the report is based on assumptions derived from both internal and external sources and these assumptions may change over time, leading to corresponding adjustments in the estimates provided. Its important to note that these forward-looking statements reflect the Companys current intentions, beliefs, or expectations and are valid as of the date they were made. The Company undertakes no obligation to publicly update or

revise any forward-looking statements, whether because of new information, future events, or otherwise.

Reference: Ministry of Agriculture & Farmers Welfare, Government of India, Agricultural and Processed Food Products Export Development Authority (APEDA), Media report, journals and press release, Business Wire News Releases, The Federation of Indian Chambers of Commerce and Industry (FICCI), National Horticulture Board (NHB)